National Bank Forecasts Faster Economic Growth for this Year

Hungary Today 2018.12.18.

The National Bank of Hungary on Tuesday said in a preliminary release of the main forecasts from its quarterly Inflation Report due on Thursday that economic growth could reach 4.7 percent in 2018, higher than the 4.4 percent growth it forecast earlier.

The NBH is projecting 2.8 percent inflation for this year, unchanged from the September edition of its Inflation Report.

The central bank is also sticking to its forecast for next year’s economic growth, projecting a rate of 3.5 percent but it lowered its expected inflation rate by 0.2 percentage points to 2.9 percent.

For 2020 the NBH expects 3 percent inflation and 3 percent GDP growth, both in line with its previous forecast.

In a first set of projections NBH also said that inflation and GDP could both grow by 3 percent in 2021.

Revisions of older data meanwhile raised the GDP growth figure for 2017 by 0.1 percentage point to 4.1 percent.

A fan chart published on Tuesday indicates that NBH expects CPI to be above the 3 percent mid-term target early 2019 but to fall below the target after Q1 as inflation trends continue to be volatile. CPI is again seen nearing the 3 percent target by early 2020.

The NBH puts the inflation target in a +/-1 percent tolerance band.

The official government forecasts for GDP growth are 4.3 percent for 2018 and 4.1 percent for 2019.

via MTIon the featured photo: György Matolcsy, Governor of National Bank of Hungary featured photo by Imre Földi/MTI